Credit: Shutterstock photoFiscal fourth quarter results from cloud computing giant Salesforce.com (CRM) demonstrated that not only is the company the leader in the space, it has a clear path to get stronger.
The San Francisco-based Salesforce noted adjusted earnings were 14 cents a share on $1.44 billion in revenue, up 25.2% year over year, but perhaps more important was the company's deferred revenue.
Deferred revenue, a key metric for software-as-a-service companies, rose 32% year over year to $3.32 billion.
CEO Marc Benioff highlighted the importance of deferred revenue in his comments. "Salesforce delivered yet another year of exceptional growth, with revenue, deferred revenue and operating cash flow all growing more than 30%, while exceeding our expectations in non-GAAP operating margin improvement," Benioff said in a statement.
Assuming constant currencies, billings growth rose 37% year over year, something Deutsche Bank analyst Karl Keirstead noted is exceptionally important. "In addition to the solid FX-adjusted billings growth rate and guidance, we liked the large deal commentary (33% growth in $10m+ deals in FY15), the 27% growth in unbilled backlog to $5.7 billion..." Keirstead wrote in a note.
Keirstead has a buy rating and raised his price target to $80 following the earnings results.
For the first quarter of fiscal 2016, Salesforce said it expects to earn on an adjusted basis between 13 and 14 cents a share a share on $1.485 to $1.505 billion in revenue. Analysts expect the company to earn 15 cents and with $1.5 billion in revenue.
For the full year, earnings on an adjusted basis are expected to be between 67 cents and 69 cents a share, with revenue between $6.475 billion and $6.52 billion. Analysts are looking for 69 cents a share and $6.5 billion in revenue.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
